Ms Deirdre Ní Fhloinn:

On whether builders should share part of the liability notwithstanding insurance, one of my first observations on this area when I first sat down to look at it four years ago was there is a disconnection of the risk between those who can control risk on site of residential construction and those who ultimately have to pay for it if they find there is a defect. If the defects policy will not pay out and the contractor is no longer available as a mark, such as if the contractor is insolvent, the home owner is left, and many home owners have been left having to pay for the repairs to their houses and apartment blocks. However, the only people entitled to be on site when a house is being built are the Building Control Authority inspectors or contractors.

If I commissioned the building of a commercial building I would have my own representative, who would be entitled to go on site, look at what is happening, point out where there are problems and tell the contractor to put it right. A consumer cannot do any of this. A consumer signs a contract and waits to be told it is time for snagging. Most consumers would not want this right and would not want to have to go to the expense of appointing their own representatives on site, but it illustrates the problem that there is very little incentive in terms of the actual risk carried.

We have spoken about enforcement by building control authorities, and that it seems to be at very low levels. People state they are not aware of any prosecutions. I have not found any information on prosecutions. When a major apartment defect came to light a few years ago, I was asked whether there should be personal liability. I extracted the section of the Act and said there is personal liability, exactly as Mr. Fitzpatrick has said, with the potential for fines and imprisonment. It is not just applicable to the company but also to directors and people involved in the management of the company. It is available, but we do not seem to have activated it. Perhaps it is a cultural thing. The right against the builder should not disappear because of the fact there is defects insurance. If somebody has signed a contract he or she should be able to rely on it. If someone happens to sell a house a month after buying it, the building contract which contains warranties with the builder for a period of 12 years should go with the house.

A point was made on home owners getting locked into who is responsible for the defects. This certainly is a feature of the small number of cases which have come before the courts. I mentioned that the Law Society's building agreement has an arbitration clause. There is very little case law from the Irish courts on the liability of builders under the contract because there is an arbitration agreement. These cases never got to the courts, but when they did there was a long list of defendants. The home owners had been involved in proceedings for years. There was a case before the Court of Appeal last year where the opinion on compliance had been given in 2000 and the case was still ongoing. This is impossible for everyone concerned, including the defendant engineer who was not in a position to defend the claim because the builder was in receivership.

We have spoken about whether losing one's livelihood is enough and about personal liability. With regard to the construction industry register, when I speak to people who have defects in their homes they are surprised there is not already a regulation system for builders, and this is part of the point about consumer education. Regulation for people who are responsible for the biggest investment we all make in our lives, and on whom we are totally dependent, is a given. Of course there should be regulation, but there is regulation of many professions and activities in Irish society and there are still defects and negligence by people who must complete annual reports stating they have fulfilled their continuous professional development, they have not had any misconduct proceedings against them and they have not been adjudicated a bankrupt. This will not remove the need for effective remedies.

A question was asked about what is meant by effective remedies and what dispute resolution looks like. I mentioned there is not even a helpline in Ireland on what to do when people discover a defect in their houses. I also mentioned New South Wales, where the office of fair trading has a dispute resolution and advocacy service, which can start quite informally and can involve various methods of dispute resolution including mediation. How exactly it would be designed would have to be looked at, but the key is that it would be fast, cost-effective and people would know where to turn when it happened.

With regard to what to do about buildings with legacy defects, I am afraid that in other jurisdictions state intervention has been required. In Ireland, unless someone comes within the pyrite resolution scheme, responsibility for legacy defects is left with the home owner. We could go the way of Canada and New Zealand, where compensation funds and various measures have been introduced. I do not know whether anything can be done. Dealing with legacy defects is essential. The Rebuilding Ireland plan has nothing in it about people who have legacy defects in their homes. It is all about delivering new homes, but we have a huge problem, obviously, with the homes we have.